What is the difference between general liability insurance and professional liability insurance, and which one do I need for my business?

General Liability vs Professional Liability Insurance

As a lawyer, I can explain the difference between general liability insurance and professional liability insurance and suggest which one you may need for your business.

General Liability Insurance

General liability insurance is a type of insurance that covers bodily injury, property damage, and personal injury claims against a business. If someone sues your business due to an injury or damage caused by your company's products or services, general liability insurance can cover the cost of legal fees and any settlements or judgments against your business.

Professional Liability Insurance

On the other hand, professional liability insurance, also known as errors and omissions (E&O) insurance, is a type of insurance that covers claims against businesses that provide professional services or advice. This type of insurance protects businesses from claims of negligence, errors or omissions, or failure to provide the promised services or advice. Professional liability insurance is typically recommended for businesses in fields such as law, medicine, engineering, accounting, and consulting.

Determining Your Business Needs

In order to determine which type of insurance your business needs, you should consider the nature of your business and the potential risks involved. If your business involves providing professional services or advice, then professional liability insurance may be necessary to protect your business from claims of negligence or errors. However, if your business involves providing products or services that may result in bodily injury or property damage, then general liability insurance may be the more appropriate choice.

It is important to note that there may be limitations or exceptions to the coverage provided by general liability and professional liability insurance policies, depending on the terms of the policy or the specifics of the claim. Therefore, it is recommended that you consult with a licensed insurance agent or attorney to review your business needs and insurance options.